Collision Course? Flat Organisations Vs. Fast Moving Millennials

But this time, the change is more than a cliche, and it’s all about millennials, their bosses and organisational structures. Specifically, millennials continue to seek out quick career advancements and the ability to grow within an organisation. Paradoxically, businesses are looking to flatten their organisational charts and remove the need for multiple layers of management – 33% of organisations according to a recent Mercer report.

However, isn’t this an obvious contradiction? Millennials are by their very nature quick to get itchy feet when there aren’t any clear advancement opportunities in front of them. Despite this fact the number of opportunities they have to move up in an organisation is shrinking.

Yet employee retention remains at the forefront of a CEO’s mind – a Harvard business Review study found that retention was actually the Number 1 thing on their mind. This result would appear to fly directly in the face of reason.

If this is the case, it would appear that businesses are disconnected from the workforce they are trying to attract. So what’s going on?

Meet the Millennials

First of all, we need to understand the much-maligned millennial. Keywords relating to this generation often include ‘Self centred’, ‘Overconfident’, and ‘Technology Dependant’. However, it’s key to look beyond these keywords in order to understand the actual ramifications for businesses that employ millennials.

Much less than just an age bracket based on when you first happened to grace this good green earth, ‘millennial’ has come to represent a mindset that has spread like wildfire, regardless of generation. It is one that also means ‘innovative’, ‘creative’ and ‘independent’.

But what kind of impact does this really have in the workplace?

Firstly, It has led to a much-publicised change in attitudes towards workplaces and jobs. Goodbye one company careers – goodbye to just working for five or six companies whilst you’re at it. These days, getting three years out of an employee is considered a good return. In fact, 6 out of 10 millennials are on the lookout for new opportunities right now.

However, talent is still expensive to both find and acquire (often quoted at over £30,000 per employee), so this is an expensive trend from a business perspective.

Additionally, the mounting pressure on employers to provide great working environments is exacerbated by the fact that 40% of millennials expect to be promoted within a couple of years. Within traditional business models, they are looking to work their way up several layers of the corporate pyramid within their limited time at each business.

All this suggests that employees are constantly on the lookout for new opportunities to advance in their careers and build up their CVs.

But how is this reflected in the businesses themselves?

Horizontal Vs. Vertical: Organisational Structures

As the Mercer report showed, many new businesses are looking to build business structures based around flat organisations, with the focus on short communication chains and removal of unnecessary layers of managers managing managers.

It’s not just the new kids on the block who are into this either. Even the likes of Elon Musk, in between daydreaming of sipping margaritas on Mars, believes that direct communication and minimum levels of bureaucracy are key for Tesla. Tony Hsieh, CEO at Zappos, has adopted an approach of decentralisation to empower the individual to self-manage and authority is distributed down to Holocracy principles.

What this means is that although opportunities to change job titles may have diminished, the opportunity to have a meaningful impact at your company has not. The same Mercer report cited earlier also noted that 31% of businesses wanted to decentralise authority in their company. This allows for greater empowerment and responsibility for employees who aren’t traditionally manager or exec level. Greater inclusion in projects and ability to have your voice heard are ways that companies can improve engagement with their employees and thus increase retention.

Sounds simple, right? Yet it’s worth taking into account the flipside. Despite these attempts for empowerment and engagement, according to a study, the number one reason for people leaving their business is still career advancement. An inability to climb the ladder is still the biggest factor prompting employees to look for professional pastures new. Whether these flat organisations are the cause or the consequence of millennials’ tendency to jump from job to job, it still leaves CEO’s scratching their heads as to how they can keep their most valuable talent from jumping ship.

Flatter organisations are a great way for C-suites to connect more with their employees on the front line and for these employees to feel like they have a meaningful impact on the business. However, this is arguably more of a short-term engagement solution. Once the initial exposure to additional responsibility fades, other long-term elements should be considered to continually engage with staff and maximise retention over a greater period of time. For instance, reward and recognition was a high priority for 97% of people surveyed by Mercer. Take into account other factors such as open communication, flexible working hours and a strong company ethos, and this starts to develop into a clearer, bigger picture.

Conclusion: Can Millenials Thrive in a Flat Company?

It is clear that the removal of managerial roles to entice ambitious millennials isn’t quite the oxymoron it appears to be. In fact, the day to day benefits a flatter organisation provides can help businesses improve efficiency and also attract top talent who yearn for this level of independence. This is fitting with the millennial mindset – regardless of age – and shows that this organisational trend is aligned with the expectations of a large (and growing) percentage of the workforce.

However, as with most things in business, there are caveats to this approach. It is clear that this is not the whole answer in itself, and companies must consider the risk this entails. As the average tenure of an employee at a business continues to drop, CEO’s are having to find more and more ways to add value to their employees’ experiences. Such additional opportunities include delegating projects, competitive reward and recognition schemes or improving engagement levels.

The concerted efforts to address the millennial-at-work phenomenon beg the question of whether lower tenure lengths are necessarily a bad thing for businesses?

About Adam

Adam comes from a background of working with people of all shapes and sizes, to use technology to solve problems of all shapes and sizes. An avid sports fan, he’s committed to maintaining a healthy work-life balance, no matter how hectic life gets. As part of the Business Development team, Adam’s role is to help businesses find solutions for their people problems.